Bill Text: FL S0854 | 2016 | Regular Session | Enrolled
Bill Title: Funeral, Cemetery, and Consumer Services
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Passed) 2016-04-01 - Chapter No. 2016-172 [S0854 Detail]
Download: Florida-2016-S0854-Enrolled.html
ENROLLED 2016 Legislature CS for CS for SB 854 2016854er 1 2 An act relating to funeral, cemetery, and consumer 3 services; amending s. 497.005, F.S.; defining terms; 4 amending s. 497.141, F.S.; revising required 5 information for licensure to include e-mail addresses; 6 requiring the Department of Financial Services to 7 include e-mail notification as a means to administer 8 the licensing process; amending s. 497.146, F.S.; 9 revising required information for current licensees to 10 include an address for e-mail notification; providing 11 for rulemaking relating to electronic reporting; 12 amending s. 497.152, F.S.; conforming provisions to 13 changes made by the act; requiring, rather than 14 authorizing, the Board of Funeral, Cemetery, and 15 Consumer Services to provide certain criteria; 16 prohibiting the board from requiring a fine when 17 certain deficiencies are fully corrected within a 18 specified period; amending s. 497.161, F.S.; revising 19 requirements for rules of the licensing authority; 20 amending s. 497.266, F.S.; revising the prohibition 21 against withdrawal or transfer of assets within the 22 care and maintenance trust fund to include an 23 exception; amending s. 497.267, F.S.; revising 24 provisions relating to the disposition of withdrawals 25 from the care and maintenance trust fund; creating s. 26 497.2675, F.S.; requiring the board to adopt certain 27 rules; requiring a licensed cemetery company to 28 request a method for withdrawal from the cemetery 29 company’s care and maintenance trust fund; providing 30 requirements for such methods; requiring that taxes on 31 capital gains be paid from the trust principal; 32 amending s. 497.268, F.S.; conforming provisions to 33 changes made by the act; deleting a required deposit 34 in a cemetery company’s care and maintenance trust 35 fund for mausoleums or columbaria; deleting the 36 requirement that taxes on capital gain be paid from 37 the trust corpus; amending s. 497.269, F.S.; requiring 38 a trustee to annually furnish financial reports that 39 record the fair market value of the care and 40 maintenance trust fund; amending ss. 497.273 and 41 497.274, F.S.; conforming provisions to changes made 42 by the act; amending ss. 497.283 and 497.286, F.S.; 43 conforming provisions to changes made by the act; 44 amending s. 497.371, F.S.; providing that an applicant 45 for the embalmer apprentice program may not be 46 licensed without a determination of character by the 47 licensing authority; amending ss. 497.372 and 497.381, 48 F.S.; conforming provisions to changes made by the 49 act; amending s. 497.452, F.S.; deleting an exception 50 that prohibits a person from receiving specified funds 51 without holding a valid preneed license; amending ss. 52 497.454 and 497.456, F.S.; conforming provisions to 53 changes made by the act; amending s. 497.458, F.S.; 54 revising requirements relating to the disposition of 55 proceeds on a preneed contract; authorizing the board 56 to specify criteria for the classification of items 57 sold in a preneed contract; requiring the trustee to 58 furnish the department with an annual report regarding 59 preneed licensee trust accounts beginning on a 60 specified date; providing requirements for the annual 61 report; revising which investments a trustee of a 62 trust has the power to invest in; deleting provisions 63 relating to the preneed licensee; amending s. 497.459, 64 F.S.; prohibiting certain preneed contracts from being 65 canceled during the life or after the death of the 66 contract purchaser or beneficiary; requiring 67 unexpended moneys on an irrevocable contract to be 68 deposited into the Medical Care Trust Fund under 69 certain circumstances; amending s. 497.460, F.S.; 70 conforming provisions to changes made by the act; 71 repealing s. 497.461, F.S., relating to the 72 authorization for a preneed licensee to elect surety 73 bonding as an alternative to depositing funds into a 74 trust; amending s. 497.462, F.S.; deleting obsolete 75 references to surety bonds; amending s. 497.464, F.S.; 76 conforming provisions to changes made by the act; 77 amending s. 497.465, F.S.; requiring an inactive 78 preneed licensee to deposit a specified amount of 79 funds received on certain preneed contracts into the 80 trust upon a specified time; amending ss. 497.601 and 81 497.607, F.S.; specifying that cremated remains are 82 not property; requiring a division of cremated remains 83 to be consented to by certain persons; providing that 84 a dispute shall be resolved by a court of competent 85 jurisdiction; conforming provisions to changes made by 86 the act; providing an effective date. 87 88 Be It Enacted by the Legislature of the State of Florida: 89 90 Section 1. Present subsections (5) through (8), (9) through 91 (31), (32) through (38), (39) through (46), (47) through (61), 92 (62) through (70), and (71) of section 497.005, Florida 93 Statutes, are redesignated as subsections (6) through (9), (11) 94 through (33), (35) through (41), (43) through (50), (52) through 95 (66), (68) through (76), and (78), respectively, and new 96 subsections (5), (10), (34), (42), (51), (67), and (77) are 97 added to that section, to read: 98 497.005 Definitions.—As used in this chapter, the term: 99 (5) “Beneficiary” means a natural person expressly 100 identified in a preneed contract as the person for whom funeral 101 merchandise or services are intended. 102 (10) “Capital gain” or “capital loss” means a change in the 103 value of a capital asset, such as investment or real estate, 104 which gives the asset a different worth than the purchase price. 105 The gain or loss is not realized until the asset is sold. 106 (34) “Fair market value” means the fair market value of 107 assets held by a trust as of a specific date, assuming all 108 assets of the trust are sold on that specific date. 109 (42) “Income” means earnings on trust assets, including 110 interest, dividends, and other income earned on the principal. 111 (51) “Net income” means, in relation to a trust, ordinary 112 income minus any income distributions for items such as trust 113 expenses. For purposes of this subsection, “ordinary income” 114 means, in relation to a trust, any earnings on trust assets, 115 including interest and dividends received on property derived 116 from the use of the trust principal, but does not include 117 capital gains or capital losses. 118 (67) “Purchaser” means a person who executes a preneed or 119 an at-need contract with a licensee for merchandise or services. 120 (77) “Total return withdrawal percentage” means a 121 percentage, not to exceed 5 percent, of the fair market value of 122 a trust. 123 Section 2. Subsections (2) and (11) of section 497.141, 124 Florida Statutes, are amended to read: 125 497.141 Licensing; general application procedures.— 126 (2) Any person desiring to be licensed shall apply to the 127 licensing authority in writing using such forms and procedures 128 as may be prescribed by rule. The application for licensure 129 shall include the applicant’s social security number if the 130 applicant is a natural person; otherwise, the applicant’s 131 federal tax identification number shall be included. 132 Notwithstanding any other provision of law, the department is 133 the sole authority for determining the forms and form contents 134 to be submitted for initial licensure and licensure renewal 135 application. Such forms and the information and materials 136 required by such forms may include, as appropriate, 137 demographics, education, work history, personal background, 138 criminal history, finances, business information, signature 139 notarization, performance periods, reciprocity, local government 140 approvals, supporting documentation, periodic reporting 141 requirements, fingerprint requirements, continuing education 142 requirements, business plans, character references, e-mail 143 addresses, and ongoing education monitoring. Such forms and the 144 information and materials required by such forms may also 145 include, to the extent such information or materials are not 146 already in the possession of the department or the board, 147 records or information as to complaints, inspections, 148 investigations, discipline, and bonding. The application shall 149 be supplemented as needed to reflect any material change in any 150 circumstance or condition stated in the application that takes 151 place between the initial filing of the application and the 152 final grant or denial of the license and that might affect the 153 decision of the department or the board. After an application by 154 a natural person for licensure under this chapter is approved, 155 the licensing authority may require the successful applicant to 156 provide a photograph of himself or herself for permanent 157 lamination onto the license card to be issued to the applicant, 158 pursuant to rules and fees adopted by the licensing authority. 159 (11) The department shall implement a system for 160 administration of the overall licensing process, including e 161 mail notification for the processing and tracking of 162 applications for licensure, the issuance of licenses approved by 163 the board, the tracking of licenses issued, the administration 164 of the license renewal process, and the collection and 165 processing of fees related to those activities. The system may 166 use staff and facilities of the department or the department may 167 enter into a contract for all or any part of such system, upon 168 such terms and conditions as the department deems advisable, and 169 such contract may be with another government agency or a private 170 business. 171 Section 3. Section 497.146, Florida Statutes, is amended to 172 read: 173 497.146 Licensing; address of record; changes; licensee 174 responsibility.—Each licensee under this chapter is responsible 175 for notifying the department in writing of the licensee’s 176 current e-mail address, business and residence mailing address, 177 and the street address of the licensee’s primary place of 178 practice and shall notify the departmentin writingwithin 30 179 days after any change in such information, in accordance with 180 procedures and forms prescribed by rule. Notwithstanding any 181 other provision of law, electronic notificationservice by182regular mailto a licensee’s last known e-mail address of record 183 or preferred street address of record with the department 184 constitutes adequate and sufficient notice to the licensee for 185 any official communication to the licensee by the board or the 186 department, except when other service is expressly required by 187 this chapter. The department may adopt rules, forms, and 188 procedures, including a procedure for electronic reporting of 189 the data provided pursuant to this section.Rules may be adopted190establishing forms and procedures for licensees to provide the191notice required by this section.192 Section 4. Paragraphs (b) and (e) of subsection (8), 193 paragraph (d) of subsection (12), paragraphs (b) and (c) of 194 subsection (14), and paragraph (b) of subsection (15) of section 195 497.152, Florida Statutes, are amended to read: 196 497.152 Disciplinary grounds.—This section sets forth 197 conduct that is prohibited and that shall constitute grounds for 198 denial of any application, imposition of discipline, or other 199 enforcement action against the licensee or other person 200 committing such conduct. For purposes of this section, the 201 requirements of this chapter include the requirements of rules 202 adopted under authority of this chapter. No subsection heading 203 in this section shall be interpreted as limiting the 204 applicability of any paragraph within the subsection. 205 (8) TRANSPORT, CUSTODY, TREATMENT, OR DISINTERMENT OF HUMAN 206 REMAINS.— 207 (b) Refusing to surrender promptly the custody of a dead 208 human body upon the express order of thepersonlegally 209 authorized person to such person’sitscustody; however, this 210 provision shall be subject to any state or local laws or rules 211 governing custody or transportation of dead human bodies. 212 (e) Failing to obtain written authorization from a legally 213 authorized person beforethe family or next of kin of the214deceased prior toentombment, interment, disinterment, 215 disentombment, or disinurnment of the remains of any human 216 being. 217 (12) DISCLOSURE REQUIREMENTS.— 218 (d) Failure by a funeral director to make full disclosure 219 in the case of a funeral or direct disposition with regard to 220 the use of funeral merchandise that is not to be disposed of 221 with the body or failure to obtain written permission from a 222 legally authorized personthe purchaserregarding disposition of 223 such merchandise. 224 (14) OBLIGATIONS REGARDING COMPLAINTS AND CLAIMS BY 225 CUSTOMERS.— 226 (b) Committing or performing with such frequency as to 227 indicate a general business practice any of the following: 228 1. Failing to acknowledge and act promptly upon 229 communications from a licensee’s customers and their 230 representatives with respect to claims or complaints relating to 231 the licensee’s activities regulated by this chapter. 232 2. Denying claims or rejecting complaints received by a 233 licensee from a customer or customer’s representative, relating 234 to the licensee’s activities regulated by this chapter, without 235 first conducting reasonable investigation based upon available 236 information. 237 3. Attempting to settle a claim or complaint on the basis 238 of a material document that was altered without notice to, or 239 without the knowledge or consent of, the contract purchaser or a 240 legally authorized personher or his representative or legal241guardian. 242 4. Failing within a reasonable time to affirm or deny 243 coverage of specified services or merchandise under a contract 244 entered into by a licensee upon written request of the contract 245 purchaser or a legally authorized personher or his246representative or legal guardian. 247 5. Failing to promptly provide, in relation to a contract 248 for funeral or burial merchandise or services entered into by 249 the licensee or under the licensee’s license, a reasonable 250 explanation to the contract purchaser or a legally authorized 251 personher or his representative or legal guardianof the 252 licensee’s basis for denying or rejecting all or any part of a 253 claim or complaint submitted. 254 (c) Making a material misrepresentation to a contract 255 purchaser or a legally authorized personher or his256representative or legal guardianfor the purpose and with the 257 intent of effecting settlement of a claim or complaint or loss 258 under a prepaid contract on less favorable terms than those 259 provided in, and contemplated by, the prepaid contract. 260 261 For purposes of this subsection, the response of a customer 262 recorded by the customer on a customer satisfaction 263 questionnaire or survey form sent to the customer by the 264 licensee, and returned by the customer to the licensee, shall 265 not be deemed to be a complaint. 266 (15) MISCELLANEOUS FINANCIAL MATTERS.— 267 (b) Failing to timely remit as required by this chapter the 268 required amounts to any trust fund required by this chapter. The 269 board shallmayby rule provide criteria for identifying minor, 270 nonwillful trust remittance deficiencies; and remittance 271 deficiencies falling within such criteria, if fully corrected 272 within 30 days after notice to the licensee by the department, 273 doshallnot constitute grounds for disciplinary action or a 274 fine. 275 Section 5. Paragraph (g) is added to subsection (1) of 276 section 497.161, Florida Statutes, to read: 277 497.161 Other rulemaking provisions.— 278 (1) In addition to such other rules as are authorized or 279 required under this chapter, the following additional rules, not 280 inconsistent with this chapter, shall be authorized by the 281 licensing authority. 282 (g) Rules, not inconsistent with part IV of this chapter 283 and the Florida Insurance Code, establishing conditions of use 284 for insurance as a funding mechanism for preneed contracts. 285 Section 6. Subsections (3) and (4) of section 497.266, 286 Florida Statutes, are amended to read: 287 497.266 Care and maintenance trust fund; remedy of 288 department for noncompliance.— 289 (3) ANoperson may not withdraw or transfer any portion of 290 assets withinthe corpus ofthe care and maintenance trust fund, 291 except as authorized by s. 497.2675, without first obtaining 292 written consent from the licensing authority. 293 (4) The trustee of the trust established pursuant to this 294 section may only invest in investments and loan trust funds, as 295 prescribed in s. 497.458. The trustee shall take title to the 296 property conveyed to the trust for the purposes of investing, 297 protecting, and conserving it for the cemetery company; 298 collecting income; and distributing withdrawals from the trust 299the principal and incomeas prescribed in this chapter. The 300 cemetery company is prohibited from sharing in the discharge of 301 the trustee’s responsibilities under this subsection, except 302 that the cemetery company may request the trustee to invest in 303 tax-free investments. 304 Section 7. Section 497.267, Florida Statutes, is amended to 305 read: 306 497.267 Disposition of withdrawals from theincome ofcare 307 and maintenance trust fund; notice to purchasers and 308 depositors.—Withdrawals from thenet income of thecare and 309 maintenance trust fund shall be used solely for the care and 310 maintenance of the cemetery, including maintenance of monuments, 311 which maintenance mayshallnot be deemed to include the 312 cleaning, refinishing, repairing, or replacement of monuments; 313 for reasonable costs of administering the care and maintenance; 314 and for reasonable costs of administering the trust fund. At the 315 time of making a sale or receiving an initial deposit, the 316 cemetery company shall deliver to the person to whom the sale is 317 made, or who makes a deposit, a written instrument which shall 318 specifically state the purposes for which withdrawals from the 319income of thetrust fund shall be used. 320 Section 8. Section 497.2675, Florida Statutes, is created 321 to read: 322 497.2675 Withdrawal methods from the care and maintenance 323 trust fund.— 324 (1) The board shall adopt rules, with the approval of the 325 department, to administer ss. 497.267 and 497.268, including, 326 but not limited to: 327 (a) Reporting requirements for a cemetery licensed under 328 this chapter, including the requirement that specific reports be 329 made on forms designed and approved by the board by rule. 330 (b) Rules to address a cemetery licensed under this chapter 331 whose pro rata share of the fair market value of the trust has 332 not grown over a 3-year average, including limiting withdrawals 333 from the care and maintenance trust fund, and any exceptions 334 approved by the board. 335 (2) Each cemetery company licensed under this chapter shall 336 elect one of two withdrawal methods, as specified in paragraphs 337 (a) and (b), for withdrawals from the cemetery company’s care 338 and maintenance trust fund. The board shall adopt rules, with 339 the approval of the department, to administer this subsection. 340 (a) Net income withdrawal method.—Net income may be 341 withdrawn from the trust, as earned, on a monthly basis. 342 (b) Total return withdrawal method.—The licensee shall 343 multiply the average fair market value of its pro rata share of 344 the trust by the total return withdrawal percentage and may 345 withdraw one-fourth of that amount at least quarterly beginning 346 the first quarter of the new trust year. The initial total 347 return withdrawal percentage elected by the licensee may not 348 increase the total return withdrawal percentage for that 349 quarter. For purposes of this paragraph, “average fair market 350 value” means, in relation to a trust, the average of the fair 351 market value of each asset held by the trust at the beginning of 352 the current year and in each of the 2 previous years, or for the 353 entire term of the trust if there are less than 2 previous 354 years, and adjusted as follows: 355 1. If assets are added to the trust during the years used 356 to determine the average, the amount of each addition is added 357 to all years in which such addition is not included. 358 2. If assets are distributed from the trust during the 359 years used to determine the average, other than in satisfaction 360 of the unitrust amount, as defined in s. 738.1041, the amount of 361 each distribution is subtracted from all other years in which 362 such distribution is not included. 363 (3) Without regard to the withdrawal method selected, taxes 364 on capital gains, if any, must be paid from the trust principal. 365 Section 9. Paragraphs (a) and (b) of subsection (1) and 366 subsection (2) of section 497.268, Florida Statutes, are amended 367 to read: 368 497.268 Care and maintenance trust fund, percentage of 369 payments for burial rights to be deposited.— 370 (1) Each cemetery company shall set aside and deposit in 371 its care and maintenance trust fund the following percentages or 372 amounts for all sums received from sales of burial rights: 373 (a) For burial rights, 10 percent of all payments received; 374 however, for sales made after September 30, 1993, no deposit 375 shall be less than $25 per burial rightgrave. For each burial 376 right which is provided without charge, the deposit to the fund 377 shall be $25. 378(b) For mausoleums or columbaria, 10 percent of payments379received.380 (2) Deposits to the care and maintenance trust fund shall 381 be made by the cemetery company not later than 30 days following 382 the close of the calendar month in which any payment was 383 received; however, when such payments are received in 384 installments, the percentage of the installment payment placed 385 in trust must be identical to the percentage which the payment 386 received bears to the total cost for the burial rights. Trust 387 income may be used to pay for all usual and customary services 388 for the operation of a trust account, including, but not limited 389 to: reasonable trustee and custodian fees, investment adviser 390 fees, allocation fees, and taxes. If the net income is not 391 sufficient to pay the fees and other expenses, the fees and 392 other expenses shall be paid by the cemetery company.Capital393gains taxes shall be paid from the corpus.394 Section 10. Section 497.269, Florida Statutes, is amended 395 to read: 396 497.269 Care and maintenance trust fund; financial 397 reports.—On or before April 1 of each year, the trustee shall 398 furnish adequate financial reports that record the fair market 399 value with respect to the care and maintenance trust fund 400 utilizing forms and procedures specified by rule. However, the 401 department may require the trustee to make such additional 402 financial reports as it deems necessary. In order to ensure that 403 the proper deposits to the trust fund have been made, the 404 department shall examine the status of the trust fund of the 405 company on a semiannual basis for the first 2 years of the trust 406 fund’s existence. 407 Section 11. Subsection (4) of section 497.273, Florida 408 Statutes, is amended to read: 409 497.273 Cemetery companies; authorized functions.— 410 (4) This chapter does not prohibit the interment or 411 entombment of the inurned cremated animal remains of the 412 decedent’s pet or pets with the decedent’s human remains or 413 cremated human remains if: 414 (a) The human remains or cremated human remains are not 415 commingled with the inurned cremated animal remains; and 416 (b) The interment or entombment with the inurned cremated 417 animal remains is with the authorization of athe decedent or418otherlegally authorized person. 419 Section 12. Subsection (1) of section 497.274, Florida 420 Statutes, is amended to read: 421 497.274 Standards for grave spaces.— 422 (1) A standard adult grave space shall measure at least 42 423 inches in width and 96 inches in length, except for preinstalled 424 vaults in designated areas. For interments, except cremated 425 remains, the covering soil shall measure no less than 12 inches 426 from the top of the outer burial container at time of interment, 427 unless such level of soil is not physically possible. In any 428 interment, a legally authorized personthe family or next of kin429 may waive the 12-inch coverage minimum. 430 Section 13. Paragraph (c) of subsection (2) of section 431 497.283, Florida Statutes, is amended to read: 432 497.283 Prohibition on sale of personal property or 433 services.— 434 (2) 435 (c) In lieu of delivery as required by paragraph (b), for 436 sales to cemetery companies and funeral establishments, and only 437 for such sales, the manufacturer of a permanent outer burial 438 receptacle which meets standards adopted by rule may elect, at 439 its discretion, to comply with the delivery requirements of this 440 section by annually submitting for approval pursuant to 441 procedures and forms as specified by rule, in writing, evidence 442 of the manufacturer’s financial responsibility with the 443 licensing authority for its review and approval.The standards444and procedures to establish evidence of financial responsibility445shall be those in s. 497.461, with the manufacturer of permanent446outer burial receptacles which meet national industry standards447assuming the same rights and responsibilities as those of a448preneed licensee under s. 497.461.449 Section 14. Subsection (3) of section 497.286, Florida 450 Statutes, is amended to read: 451 497.286 Owners to provide addresses; presumption of 452 abandonment; abandonment procedures; sale of abandoned unused 453 burial rights.— 454 (3) Upon the occurrence of a presumption of abandonment as 455 set forth in subsection (2), a cemetery may file with the 456 department a certified notice attesting to the abandonment of 457 the burial rights. The notice shall do the following: 458 (a) Describe the burial rights certified to have been 459 abandoned; 460 (b) Set forth the name of the owner or owners of the burial 461 rights, or if the owner is known to the cemetery to be deceased, 462 then the names, if known to the cemetery, of such claimants as 463 are heirs at law, next of kin, or specific devisees under the 464 will of the owner or the legally authorized person; 465 (c) Detail the facts with respect to the failure of the 466 owner or survivors as outlined in this section to keep the 467 cemetery informed of the owner’s address for a period of 50 468 consecutive years or more; and 469 (d) Certify that no burial right has been exercised which 470 is held in common ownership with any abandoned burial rights as 471 set forth in subsection (2). 472 Section 15. Section 497.371, Florida Statutes, is amended 473 to read: 474 497.371 Embalmers; establishment of embalmer apprentice 475 program.—The licensing authority adopts rules establishing an 476 embalmer apprentice program. An embalmer apprentice may perform 477 only those tasks, functions, and duties relating to embalming 478 which are performed under the direct supervision of an embalmer 479 who has an active, valid license under s. 497.368 or s. 497.369. 480 An embalmer apprentice isshall beeligible to serve in an 481 apprentice capacity for a period not to exceed 3 years as may be 482 determined by licensing authority rule or for a period not to 483 exceed 5 years if the apprentice is enrolled in and attending a 484 course in mortuary science or funeral service education at any 485 mortuary college or funeral service education college or school. 486 An embalmer apprentice shall be issued a licenselicensedupon 487 payment of a licensure fee as determined by licensing authority 488 rule but not to exceed $200. An applicant for the embalmer 489 apprentice program may not be issued a license unless the 490 licensing authority determines that the applicant is of good 491 character and has not demonstrated a history of lack of 492 trustworthiness or integrity in business or professional 493 matters. 494 Section 16. Paragraph (b) of subsection (1) of section 495 497.372, Florida Statutes, is amended to read: 496 497.372 Funeral directing; conduct constituting practice of 497 funeral directing.— 498 (1) The practice of funeral directing shall be construed to 499 consist of the following functions, which may be performed only 500 by a licensed funeral director: 501 (b) Planning or arranging, on an at-need basis, the details 502 of funeral services, embalming, cremation, or other services 503 relating to the final disposition of human remains, including 504 the removal of such remains from the state, with the family or505friends of the decedent or any other person responsible for such506services; setting the time of the services; establishing the 507 type of services to be rendered; acquiring the services of the 508 clergy; and obtaining vital information for the filing of death 509 certificates and obtaining of burial transit permits. 510 Section 17. Subsection (4) of section 497.381, Florida 511 Statutes, is amended to read: 512 497.381 Solicitation of goods or services.— 513 (4) At-need solicitation of funeral merchandise or services 514 is prohibited. ANofuneral director or direct disposer or her 515 or his agent or representative may not contact the legally 516 authorized person or familyor next of kin of a deceased person517 to sell services or merchandise unless the funeral director or 518 direct disposer or her or his agent or representative has been 519 initially called or contacted by the legally authorized person 520 or familyor next of kin of such personand requested to provide 521 her or his services or merchandise. 522 Section 18. Paragraph (c) of subsection (2) of section 523 497.452, Florida Statutes, is amended to read: 524 497.452 Preneed license required.— 525 (2) 526(c) The provisions of paragraph (a) do not apply to any527Florida corporation existing under chapter 607 acting as a528servicing agent hereunder in which the stock of such corporation529is held by 100 or more persons licensed pursuant to part III of530this chapter, provided no one stockholder holds, owns, votes, or531has proxies for more than 5 percent of the issued stock of such532corporation; provided the corporation has a blanket fidelity533bond, covering all employees handling the funds, in the amount534of $50,000 or more issued by a licensed insurance carrier in535this state; and provided the corporation processes the funds536directly to and from the trustee within the applicable time537limits set forth in this chapter. The department may require any538person claiming that the provisions of this paragraph exempt it539from the provisions of paragraph (a) to demonstrate to the540satisfaction of the department that it meets the requirements of541this paragraph.542 Section 19. Subsections (1) and (3) of section 497.454, 543 Florida Statutes, are amended to read: 544 497.454 Approval of preneed contract and related forms.— 545 (1) Preneed contract forms and related forms shall be filed 546 with and approved by the licensing authority beforeprior to547 use, pursuant to procedures specified by rule. The licensing 548 authority may not approve any electronic or paper preneed 549 contractformthat does not provide for sequential prenumbering 550 thereon. 551(3) Specific disclosure regarding the preneed licensee’s552ability to select either trust funding or the financial553responsibility alternative as set forth in s. 497.461 in554connection with the receipt of preneed contract proceeds is555required in the preneed contract.556 Section 20. Subsections (2), (7), and (8) of section 557 497.456, Florida Statutes, are amended to read: 558 497.456 Preneed Funeral Contract Consumer Protection Trust 559 Fund.— 560 (2) Within 60 days after the end of each calendar quarter, 561 for each preneed contract written during the quarter and not 562 canceled within 30 days after the date of the execution of the 563 contract, each preneed licensee, whether funding preneed 564 contracts by the sale of insurance or by establishing a trust 565 pursuant to s. 497.458 or s. 497.464, shall remit the sum of 566 $2.50 for each preneed contract having a purchase price of 567 $1,500 or less, and the sum of $5 for each preneed contract 568 having a purchase price in excess of $1,500; and each preneed 569 licensee utilizings. 497.461 ors. 497.462 shall remit the sum 570 of $5 for each preneed contract having a purchase price of 571 $1,500 or less, and the sum of $10 for each preneed contract 572 having a purchase price in excess of $1,500. 573 (7) In any situation in which a delinquency proceeding has 574 not commenced, the licensing authority may, in its discretion, 575 use the trust fund for the purpose of providing restitution to 576 any consumer, owner, or beneficiary of a preneed contract or 577 similar regulated arrangement under this chapter entered into 578 after June 30, 1977. If, after investigation, the licensing 579 authority determines that a preneed licensee has breached a 580 preneed contract by failing to provide benefits or an 581 appropriate refund, or that a provider, who is a former preneed 582 licensee or an establishment which has been regulated under this 583 chapter, has sold a preneed contract and has failed to fulfill 584 the arrangement or provide the appropriate refund, and such 585 preneed licensee or provider does not provide or does not 586 possess adequate funds to provide appropriate refunds, payments 587 from the trust fund may be authorized by the licensing 588 authority. In considering whether payments shall be made or when 589 considering who will be responsible for such payments, the 590 licensing authority shall consider whether the preneed licensee 591 or previous provider has been acquired by a successor who is or 592 should be responsible for the liabilities of the defaulting 593 entity. With respect to preneed contracts funded by life 594 insurance, payments from the fund shall be made: if the insurer 595 is insolvent, but only to the extent that funds are not 596 available through the liquidation proceeding of the insurer; or 597 if the preneed licensee is unable to perform under the contract 598 and the insurance proceeds are not sufficient to cover the cost 599 of the merchandise and services contracted for. In no event 600 shall the licensing authority approve payments in excess of the 601 insurance policy limits unless it determines that at the time of 602 sale of the preneed contract, the insurance policy would have 603 paid for the services and merchandise contracted for. Such 604 monetary relief shall be in an amount as the licensing authority 605 may determine and shall be payable in such manner and upon such 606 conditions and terms as the licensing authority may prescribe. 607 However, with respect to preneed contracts to be funded pursuant 608 to s. 497.458, s. 497.459,s. 497.461,or s. 497.462, any 609 restitution made pursuant to this subsection mayshallnot 610 exceed, as to any single contract or arrangement, the lesser of 611 the gross amount paid under the contract or 4 percent of the 612 uncommitted assets of the trust fund. With respect to preneed 613 contracts funded by life insurance policies, any restitution may 614shallnot exceed, as to any single contract or arrangement, the 615 lesser of the face amount of the policy, the actual cost of the 616 arrangement contracted for, or 4 percent of the uncommitted 617 assets of the trust fund. The total of all restitutions made to 618 all applicants under this subsection in a single fiscal year may 619shallnot exceed the greater of 30 percent of the uncommitted 620 assets of the trust fund as of the end of the most recent fiscal 621 year or $120,000. The department may use moneys in the trust 622 fund to contract with independent vendors pursuant to chapter 623 287 to administer the requirements of this subsection. 624 (8) All moneys deposited in the Preneed Funeral Contract 625 Consumer Protection Trust Fund together with all accumulated 626 appreciationincomeshall be used only for the purposes 627 expressly authorized by this chapter and mayshallnot be 628 subject to any liens, charges, judgments, garnishments, or other 629 creditor’s claims against the preneed licensee, any trustee 630 utilized by the preneed licensee, any company providing a surety 631 bond as specified in this chapter, or any purchaser of a preneed 632 contract. No preneed contract purchaser shall have any vested 633 rights in the trust fund. 634 Section 21. Paragraphs (a), (d), and (f) of subsection (1) 635 of section 497.458, Florida Statutes, are amended, a new 636 paragraph (k) is added to that subsection, and paragraph (a) of 637 subsection (3), subsection (4), paragraphs (a) and (c) of 638 subsection (5), and subsections (6) through (9) of that section 639 are amended, to read: 640 497.458 Disposition of proceeds received on contracts.— 641 (1)(a) Any person who is paid, collects, or receives funds 642 under a preneed contract for funeral services or merchandise or 643 burial services or merchandise shall deposit an amount at least 644 equal to the sum of 70 percent of the purchase price collected 645 for all services sold and facilities rented; 100 percent of the 646 purchase price collected for all cash advance items sold; and 30 647 percent of the purchase price collected or 110 percent of the 648 wholesale cost, whichever is greater, for each item of 649 merchandise sold. The board may, by rule, specify criteria for 650 the classification of items sold in a preneed contract as 651 services, cash advances, or merchandise. 652 (d) The trustee shall take title to the property conveyed 653 to the trust for the purpose of investing, protecting, and 654 conserving it for the preneed licensee; collecting income; and 655 distributing the fair market valueprincipal and incomeas 656 prescribed in this chapter. The preneed licensee is prohibited 657 from sharing in the discharge of these responsibilities, except 658 that the preneed licensee may request the trustee to invest in 659 tax-free investments and may appoint an adviser to the trustee. 660 The licensing authority may adopt rules limiting or otherwise 661 specifying the degree to which the trustee may rely on the 662 investment advice of an investment adviser appointed by the 663 preneed licensee. The licensing authority may adopt rules 664 limiting or prohibiting payment of fees by the trust to 665 investment advisors that are employees or principals of the 666 licensee to whom the trust fund relates. 667 (f) The deposited funds shall be held in trust, both as to 668 principal and any change in fair market valueincome earned669 thereon, and shall remain intact, except that the cost of the 670 operation of the trust or trust account authorized by this 671 section may be deducted from the income earned thereon. 672 (k) Beginning April 1, 2018, and on or before each April 1 673 thereafter, the trustee shall furnish the department with an 674 annual report regarding each preneed licensee trust account held 675 by the trustee at any time during the previous calendar year. 676 The report shall state the name and address of the trustee; the 677 name, address, and license number of the licensee to whom the 678 report relates; the trust account number; the beginning and 679 ending trust balance; and, as may be specified by department 680 rule, a list of receipts showing the date and amount of any 681 disbursement. The report must be signed by the trustee’s account 682 manager for the trust account. The trustee shall submit the 683 report in a format and pursuant to procedures specified by 684 department rule. 685 (3)(a) The trustee shall make regular valuations of assets 686 it holds in trust and provide a fair market value report of such 687 valuations to the preneed licensee at least quarterly. 688 (4) The licensing authority may adopt rules exempting from 689 the prohibition of paragraph (1)(g)(1)(h), pursuant to criteria 690 established in such rule, the investment of trust funds in 691 investments, such as widely and publicly traded stocks and 692 bonds, notwithstanding that the licensee, its principals, or 693 persons related by blood or marriage to the licensee or its 694 principals have an interest by investment in the same entity, 695 where neither the licensee, its principals, or persons related 696 by blood or marriage to the licensee or its principals have the 697 ability to control the entity invested in, and it would be in 698 the interest of the preneed contract holders whose contracts are 699 secured by the trust funds to allow the investment. 700 (5) The trustee of the trust established pursuant to this 701 section shall only have the power to: 702 (a) Invest in investments as prescribed in s. 518.11215.47703 and exercise the powers set forth in part VIII of chapter 736. 704 However, the trustee may not invest in, or count as assets, life 705 insurance policies or annuity contracts; real estate may not 706 compose more than 25 percent of the trust’s assets; and,707provided thatthe licensing authority may by order require the 708 trustee to liquidate or dispose of any investment within 30 days 709 after such order, or within such other times as the order may 710 direct. The licensing authority may issue such order if it 711 determines that the investment violates any provision of this 712 chapter or is not in the best interests of the preneed contract 713 holders whose contracts are secured by the trust funds. 714 (c) Commingle the property of the trust with the property 715 of any other trust established pursuant to this chapter and make 716 corresponding allocations and divisions of assets, liabilities, 717 income,andexpenses, and capital gains and losses. 718(6) The preneed licensee, at her or his election, shall719have the right and power, at any time, to revest in it title to720the trust assets, or its pro rata share thereof, provided it has721complied with s. 497.461.722(7) Notwithstanding anything contained in this chapter to723the contrary, the preneed licensee, via its election to sell or724offer for sale preneed contracts subject to this section, shall725represent and warrant, and is hereby deemed to have done such,726to all federal and Florida taxing authorities, as well as to all727potential and actual preneed contract purchasers, that:728(a) Section 497.461 is a viable option available to it at729any and all relevant times;730(b) Section 497.462 is a viable option available to it at731any and all relevant times for contracts written prior to July7321, 2001, for funds not held in trust as of July 1, 2001; or733(c) For any preneed licensee authorized to do business in734this state that has total bonded liability exceeding $100735million as of July 1, 2001, s. 497.462 is a viable option to it736at any and all relevant times for contracts written prior to737December 31, 2004, for funds not held in trust as of July 1,7382001.739(8) If in the preneed licensee’s opinion it does not have740the ability to select the financial responsibility alternative741of s. 497.461 or s. 497.462, then the preneed licensee shall not742have the right to sell or solicit preneed contracts.743 (6)(9)The amounts required to be placed in a trust by this 744 section for contracts previously entered into shall be as 745 follows: 746 (a) For contracts entered into before October 1, 1993, the 747 trust amounts as amended by s. 6, chapter 83-316, Laws of 748 Florida, shall apply. 749 (b) For contracts entered into on or after October 1, 1993, 750 the trust amounts as amended by s. 98, chapter 93-399, Laws of 751 Florida, shall apply. 752 Section 22. Paragraph (a) of subsection (6) of section 753 497.459, Florida Statutes, is amended to read: 754 497.459 Cancellation of, or default on, preneed contracts.— 755 (6) OTHER PROVISIONS.— 756 (a) All preneed contracts are cancelable and revocable as 757 provided in this section, provided that a preneed contract does 758 not restrict any contract purchaser who is the beneficiary of 759 the preneed contract and who is a qualified applicant for, or a 760 recipient of, supplemental security income, temporary cash 761 assistance, or Medicaid from making her or his contract 762 irrevocable. A preneed contract that is made irrevocable 763 pursuant to this section may not be canceled during the life or 764 after the death of the contract purchaser or beneficiary as 765 described in this section. Any unexpended moneys paid on an 766 irrevocable contract shall be remitted to the Agency for Health 767 Care Administration for deposit into the Medical Care Trust Fund 768 after final disposition of the beneficiary. 769 Section 23. Section 497.460, Florida Statutes, is amended 770 to read: 771 497.460 Payment of funds upon death of named beneficiary. 772 Disbursements of funds discharging any preneed contract 773 fulfilled after September 30, 1993, shall be made by the trustee 774 to the preneed licensee upon receipt of a certified copy of the 775 death certificate of the contract beneficiary or satisfactory 776 evidence as established by rule of the licensing authority that 777 the preneed contract has been performed in whole or in part. 778 However, if the contract is only partially performed, the 779 disbursement shall only cover the fair market value of that 780 portion of the contract performed. In the event of any contract 781 default by the contract purchaser, or in the event that the 782 funeral merchandise or service or burial merchandise or service 783 contracted for is not provided or is not desired by the legally 784 authorized personheirs or personal representative of the785contract beneficiary, the trustee shall return, within 30 days 786 after its receipt of a written request therefor, funds paid on 787 the contract to the preneed licensee or to its assigns, subject 788 tothe provisions ofs. 497.459. 789 Section 24. Section 497.461, Florida Statutes, is repealed. 790 Section 25. The repeal of s. 497.461, Florida Statutes, by 791 this act does not apply to a preneed licensee who has elected to 792 maintain a surety bond in lieu of depositing funds into a trust 793 as of July 1, 2016. 794 Section 26. Subsection (2), paragraph (a) of subsection 795 (3), and subsections (7) and (10) of section 497.462, Florida 796 Statutes, are amended to read: 797 497.462 Other alternatives to deposits under s. 497.458.— 798(2) Upon prior approval by the licensing authority, the799preneed licensee may file a letter of credit with the licensing800authority in lieu of a surety bond. Such letter of credit must801be in a form, and is subject to terms and conditions, prescribed802by the board. It may be revoked only with the express approval803of the licensing authority.804 (2)(3)(a) A buyer of preneed merchandise or services who 805 does not receive such services or merchandise due to the 806 economic failure, closing, or bankruptcy of the preneed licensee 807 must file a claim with the surety as a prerequisite to payment 808 of the claim and, if the claim is not paid, may bring an action 809 based on the bond and recover against the surety.In the case of810a letter of credit or cash deposit that has been filed with the811licensing authority, the buyer may file a claim with the812licensing authority.813 (6)(7)Any preneed contract which promises future delivery 814 of merchandise at no cost constitutes a paid-up contract. 815 Merchandise which has been delivered is not covered by the 816 required performance bondor letter of crediteven though the 817 contract is not completely paid. The preneed licensee may not 818 cancel a contract unless the purchaser is in default according 819 to the terms of the contract and subject to the requirements of 820 s. 497.459. A contract sold, discounted, and transferred to a 821 third party constitutes a paid-up contract for the purposes of 822 the performance bondor letter of credit. 823 (9)(10)The licensing authority may adopt forms and rules 824 necessary to implement this section, including, but not limited 825 to, rules which ensure that the surety bond providesand line of826credit provideliability coverage for preneed merchandise and 827 services. 828 Section 27. Paragraphs (c) and (f) of subsection (1) of 829 section 497.464, Florida Statutes, are amended to read: 830 497.464 Alternative preneed contracts.— 831 (1) Nothing in this chapter shall prevent the purchaser and 832 the preneed licensee from executing a preneed contract upon the 833 terms stated in this section. Such contracts shall be subject to 834all provisions ofthis chapter except: 835(c) Section 497.458(1), (3), and (6).836(f) Section 497.461.837 Section 28. Subsection (2) and paragraph (c) of subsection 838 (9) of section 497.465, Florida Statutes, are amended to read: 839 497.465 Inactive, surrendered, and revoked preneed 840 licensees.— 841 (2) Upon becoming inactive, a preneed licensee shall cease 842 all preneed sales to the public andupon becoming inactive. the843preneed licenseeshallcollect anddeposit into the trust all 844 funds it receives on or after the date on which it becomes 845 inactive from sales ofinto trust all of the funds paid toward846 preneed contracts sold beforeprior tobecoming inactive. 847 (9) The licensing authority may adopt rules for the 848 implementation of this section, for the purpose of ensuring a 849 thorough review and investigation of the status and condition of 850 the preneed licensee’s business affairs for the protection of 851 the licensee’s preneed customers. Such rules may include: 852 (c) Requirements for submission ofunaudited or audited853 financial statements, as the licensing authority deems 854 advisable. 855 Section 29. Paragraph (b) of subsection (1) of section 856 497.601, Florida Statutes, is amended to read: 857 497.601 Direct disposition; duties.— 858 (1) Those individuals licensed as direct disposers may 859 perform only those functions set forth below: 860 (b) Secure pertinent information from a legally authorized 861 personthe decedent’s next of kinin order to complete the death 862 certificate and to file for the necessary permits fordirect863 disposition. 864 Section 30. Subsection (1) of section 497.607, Florida 865 Statutes, is amended, present subsections (2), (3), and (4) of 866 that section are redesignated as subsections (3), (4), and (5), 867 respectively, and a new subsection (2) is added to that section, 868 to read: 869 497.607 Cremation; procedure required.— 870 (1) At the time of the arrangement for a cremation 871 performed by any person licensed pursuant to this chapter, the 872 legally authorized person contracting for cremation services 873 shall be required to designate her or his intentions with 874 respect tothedisposition of the cremated remains of the 875 deceased in a signed declaration of intent which shall be 876 provided by and retained by the funeral or direct disposal 877 establishment. A cremation may not be performed until a legally 878 authorized person gives written authorization, which may include 879 the declaration of intent to dispose of the cremated remains, 880 for such cremation. The cremation must be performed within 48 881 hours after a specified time which has been agreed to in writing 882 by the person authorizing the cremation. 883 (2) Cremated remains are not property, as defined in s. 884 731.201(32), and are not subject to partition for purposes of 885 distribution under s. 733.814. A division of cremated remains 886 requires the consent of the legally authorized person who 887 approved the cremation or, if the legally authorized person is 888 the decedent, the next legally authorized person pursuant to s. 889 497.005(43). A dispute regarding the division of cremated 890 remains shall be resolved by a court of competent jurisdiction. 891 Section 31. This act shall take effect July 1, 2016.